Saturday 14 July 2012

GST Voucher 2012 cash payout too little for some

By Jermyn Chow, The Straits Times, 13 Jul 2012

SOME 150 people have written to the Finance Ministry after they received letters from the ministry informing them of how much help they will get under the new GST Voucher Fund.

A ministry spokesman said the majority of responses were about the scheme's cash handouts - some people wanted to know why they were not eligible; others said the payment was too little.

The cash payment of up to $250 is one of three parts in the GST Voucher scheme, announced during the Budget debate in February, to help low- and middle-income families pay for their daily expenses, including utility and medical bills.

On July 2, letters were sent to the 2.1 million Singaporeans who would be receiving benefits from the scheme. Those with assessable incomes of $24,000 or less a year and those living in homes with an annual value of $20,000 or less will get either $100 or $250 in cash from next month.

The other two handouts are:
- Medisave top-ups for about 85 per cent of all Singaporeans above 65 years old 
U-Save utility rebates for some 800,000 HDB households
The rebates, given out in January and July each year, range from $180 to $260 per rebate.

Responding to queries from The Straits Times, the Finance Ministry spokesman said that the ministry would be 'assessing appeals case by case'.

She added that the eligibility criteria for the scheme would be reviewed to 'ensure that the lower-income continue to receive help with their GST expenses in the most efficient and effective manner'.

MPs interviewed said that it is still early days to gauge the ground sentiments towards the new scheme, as most have heard from only a handful of residents over the past week.

While most residents were happy with the extra cash, others felt they deserved more, said the MPs.

Dr Lily Neo of Tanjong Pagar GRC said: 'For those who are really down and out and have many mouths to feed at home, the money may not go very far and they still have to rely on the other financial assistance schemes.'

MP Tin Pei Ling of Marine Parade GRC said when she encounters such residents, she would explain to them that the payouts are meant to help offset GST costs.

'For those who need subsidies to tide them over their financial difficulties, there are other schemes like public assistance and ComCare vouchers,' she said.

A budget of $3.6 billion has been set aside to fund the GST Voucher scheme for five years until 2016. This year alone, $680 million of the sum will be spent.

The voucher payments were designed to offset the 7 per cent goods and services tax that the lower 50 per cent of retiree households pay on their expenses. This group generally live in one-, two- or three-bedroom HDB flats.

Who gets what


$250: To those with assessable income of $24,000 or less and live in a home with an annual value of $13,000 or less.

$100: To those with assessable income of $24,000 or less and live in a home with an annual value of more than $13,000 and up to $20,000.

About $340 million will be paid out on Aug 1.


The annual top-up applies to the Medisave accounts of Singaporeans aged 65 and above and living in properties with an annual value not exceeding $20,000.

About 85 per cent of all elderly Singaporeans will benefit.


These will be given to 800,000 HDB households to help offset their monthly utility bills.

Singaporeans abroad and GST vouchers

MR JAGIR Singh Riar ('Settlers abroad shouldn't get GST vouchers'; Tuesday) has rightly pointed out that the GST Voucher should be aimed at benefiting the less well-off Singaporeans who incur goods and services tax (GST) here.

The voucher's benefits are significant.

On average, it will help lower-income families offset about half of the GST they pay each year.

Retiree couples living by themselves in smaller flats can expect to receive a GST Voucher that will more than fully offset their yearly GST expenses.

Middle-income families can also expect to receive a voucher that will partially offset their GST expenses.

For the fiscal redistribution scheme, we need a way to distinguish between those who incur GST in Singapore, and those who do not, from among the entire population of adult Singaporeans.

We have used Singaporeans' place of residence registered with the Government as the basis to decide whether they incur GST in Singapore.

Invariably, these may also include a small group of Singaporeans who study, work or live overseas, and return to Singapore from time to time.

Our system is by no means perfect, but it is a practical, objective and efficient way to ensure that the target group of 2.1 million beneficiaries receive their payments expeditiously.

We will continue to fine-tune our approach with experience, and we thank Singaporeans like Mr Singh who have provided useful feedback on the GST Voucher scheme.

Lim Bee Khim (Ms)
Director (Corporate Communications)
Ministry of Finance
ST Forum, 13 Jul 2012

Settlers abroad shouldn't get GST vouchers

THE GST voucher scheme ensures that citizens, particularly those in the lower- and middle-income groups, are not hurt by the goods and services tax ('GST voucher plan to help 2.1 million'; July 1). It is meant to help citizens residing in Singapore.

However, there are a number of citizens who reside abroad and have called foreign countries home, even though they remain Singaporeans and maintain local addresses on their identity cards.

In fact, some may have even acquired the citizenship of another country but have not revoked their Singapore citizenship.

They visit the Republic for a few days using their Singapore passports, but perhaps travel to other countries using passports of the countries they are residing in.

It is unfair to allocate GST vouchers or any other government benefits to such citizens. This loophole must be plugged. Exceptions could be made for students studying abroad or staff posted overseas by local firms and government agencies.

To qualify for GST vouchers and Growth Dividends, a minimum residing period of six months in Singapore, in the year prior to receiving the vouchers and dividends, must be made a condition for citizens.

Jagir Singh Riar
ST Forum, 10 Jul 2012

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